- Silver advances on the back of lower US T-bond yields, despite high inflationary pressures.
- FOMC’s September meeting minutes showed that half of its members expect an interest rate hike by 2022.
- Further, the Fed minutes revealed that the pace of the QE reduction would be in the amount of US $15 billion.
Silver (XAG/USD) climbs during the New York session, trading at $23.09, up almost 2.35% at the time of writing. Factors like the August US higher inflation reading with the Consumer Price Index, rising 5.4% (YoY), the energy crisis in Asia and Europe, and falling US T-bond yields boosts the white metal.
Moreover, on Tuesday, Federal Reserve members, across the wires, expressed that they would like to start the QE’s reduction by the November meeting. Additionally, FOMC last meeting minutes just released revealed that half of its members expect an interest rate hike by the end of 2022. Further, the pace of monthly asset purchases will be reduced by $15 billion, with $10 billion in the case of Treasury securities and $5 billion In the case of mortgage-backed securities (MBS).
The market sentiment is slightly upbeat, as depicted by US stock indexes rising between 0.20% and 0.65%, except for the Dow Jones Industrial, which is falling 0.07%.
The US Dollar Index that tracks the greenback’s performance against a basket of peers is down 0.41%, sits at 94.13, underpinned by the slump in the US T-bond 10-year benchmark note rate sliding three basis points to sit at 1.549%, lifting the prospects of higher non-yield metal prices.
XAG/USD Price Forecast: Technical outlook
Silver (XAG/USD) approaches the 50-day moving average (DMA) around $23.28. The longer time frame daily moving averages are located above the spot price, indicating that the white metal is in a downtrend. The Relative Strength Index, known as RSI, a momentum indicator, is at 54, with an upslope, suggesting that silver has some buying pressure.
A daily close above the 50-DMA could open the way for another leg up, towards $24.85, but it would find some hurdles on the way up. The first resistance would be $23.94. A breach of the latter coupled with a break above $24.00. could accelerate the upward trend towards the next supply zone at $24.28 before reaching $24.85.
KEY ADDITIONAL LEVELS TO WATCH